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Liverpool change tack as coronavirus cost-cutting continues

NEW YORK, NY - MAY 23: Peter Moore,Chief Executive Officer, Liverpool FC during the Leaders Sport Business Summit 2018 on May 23, 2018 in New York City. (Photo by Mike Stobe/Getty Images for Leaders)

More sports organisations and athletes around the world are cutting pay and introducing other cost-saving measures as the economic impact of the coronavirus bites.

In some cases, such as in the English Premier League and at Liverpool FC, wage cuts have become a high-profile political story. Liverpool yesterday backed away from its previous plan to use a UK government support scheme to help pay its staff’s wages, following a negative reaction from fans and the public.

In a letter to fans, club chief executive Peter Moore said: “We believe we came to the wrong conclusion last week to announce that we intended to apply to the Coronavirus Retention Scheme and furlough staff due to the suspension of the Premier League football calendar, and are truly sorry for that.”

Moore said the club would examine “alternative ways to operate”, but warned that it was preparing for scenarios that “involve a massive downturn in revenue, with correspondingly unprecedented operating losses. Having these vital financial resources so profoundly impacted would obviously negatively affect our ability to operate as we previously have.”

UK-based Formula 1 teams Williams and Racing Point yesterday followed McLaren in furloughing staff. Williams’ drivers and senior management are taking 20-per-cent pay cuts, and staff are being furloughed until at least the end of May.

McLaren chief executive Zak Brown at the weekend warned that Formula 1 is in “a very fragile state” due to the impact of the coronavirus crisis on their finances, and that some of its teams were at risk of shutting down.

In Indonesian football, clubs are cutting salaries of players, coaches and officials by more than 75 per cent for the four-month period from March to June, under advice from the country’s football association. Liga 1 club Persita Tangerang is paying its staff in full for March, then just 10 per cent of their normal wages for April to June.

The Indonesian government has said it would not be financially supporting professional sports leagues during the pandemic.

Players and staff at Fiji Rugby have agreed to a 40-per-cent pay cut. Chief executive John O’Connor said that if the crisis continued, the organisation would consider leave without pay and “further drastic reductions”. The austerity measures were introduced after consultation with World Rugby, which funds the union’s high-performance programme.

The 28 players of Japanese J.League football team Hokkaido Consadole Sapporo are giving up a combined 100m yen ($920,000) of their annual salaries. The club is expecting a total loss of more than 500m yen this season.

As of April 1, there had been no such moves in the Korean K League, with the Yonhap news agency reporting that the league’s player contracts did not include clauses allowing clubs to cut wages, and that no players had yet stepped forward to volunteer pay cuts. One K League club official said “I don’t think any club can take any preemptive action. There has to be some consensus across the entire league first.”

Moving money in the other direction, Bangladesh Cricket Board is making a one-time payment to 300 staff members to support them through the crisis, including ground staff, scorers, field workers, office staff, security, and cleaners. The board’s 200 ground staff across the country are on monthly wages of Tk11,000 ($130), and the 90 other staff members earn Tk12,400 per month.

In recent weeks, Spanish LaLiga football clubs Barcelona, Atletico Madrid and Espanyol have announced pay cuts. Barcelona and Atletico used Spanish legislation to push through 70-per-cent pay cuts for players and staff, but first team players also made additional donations to ensure that non-playing staff continue to earn their full salaries. Espanyol is applying pay cuts to sporting staff only.

LaLiga has urged other clubs to also use the legislative measure, known as ‘an ERTE’, to introduce pay cuts. The league said professional football represented 1.37 per cent of Spain’s GDP, and created 185,000 jobs.

In Italy, the players and manager at Serie A football team Juventus have agreed to freeze their pay for four months. German football teams Bayern Munich and Borussia Dortmund have also announced cuts.

Chinese football, notorious for paying high packages to foreign stars and prominent coaches, could be about to join other leagues in cutting high salaries. According to Chinese media reports, Chinese Super League clubs will meet this week with the topic of pay cuts among the issues to be discussed. A meeting of board directors and shareholders of the 16 clubs is set for Thursday.